a week in wireless


Show and tell

AWIW475

It was all about the numbers this week as the great and the good of the industry played show and tell with their bank statements. There weren’t many in the market revelling in unreservedly good news on the financial front but, true to form, Apple had another bonanza to report.

Such is the regularity with which the iPhone vendor hoovers up mind-boggling sums of the folding stuff that the Informer has commissioned a new key for his office computer that says Applepostsrecordprofits, which will save him from having to type it out word by word every three months.

In the last 92 days of calendar 2011, Apple grossed $46.33bn, which is more or less equivalent to the GDP of Slovenia for 2010. Net profit for the quarter was $13.06bn, which exceeded by some distance the total revenue Google managed to gather for the same period, which was a dash over $10bn.

How long can this tremendous growth continue? Revenue was up 75 per cent year on year, while profit more than doubled. With 37 million iPhones sold, shipments were up 128 per cent year on year. And there was a 111 per cent upturn in iPad sales, with 15 million units shipped. The popularity of this increasingly mass market duo is filtering back to Apple’s desktop business as well. The firm’s PCs retail at a substantial premium to most Windows-based machines, but sales were nonetheless up 26 per cent at 5.2 million units.

With the iPhone 5 certain to come later this year, and a TV play also widely anticipated, you can expect the big numbers to keep on coming.

How others must envy such a performance. Nokia, still the handset market leader, leaked €954m for the final quarter of 2011, compared to an operating profit of €884m for the same period in 2010, and a €71m loss for Q3 last year. CEO Stephen Elop made a valiant effort to accentuate some positives, trumpeting sales of more than one million Lumia smartphones; Nokia’s new flagship handsets based on Microsoft’s Windows Phone platform.

But the firm’s struggles in the lower end of the market—which has sustained its leadership during wilderness years in the high end—show no signs of letting up. The long, drawn out demise of Symbian continues, with Elop confirming that the platform is losing out to low-priced smartphones. Nokia is revising its forecasts for Symbian-based unit sales downwards. Exactly how far, Elop didn’t say.

Nokia really has its work cut out. The Informer has had a good play with the Lumia800 and it’s a great device (the pre-commercial model that he has is a bit temperamental) but will it really spearhead a turn-around? The Finnish vendor also announced this week that it had flogged its 1.5 billionth S40 device, one of its new Asha feature phones. These will prove just as important as the high end product for Nokia in 2012.

Elsewhere in the device vendor community, Samsung netted $3.5bn for the final quarter, contributing to annual profit of $12.2bn. This is down 15 per cent year on year, and the Korean player’s endless legal spats with Apple are probably taking their toll. Motorola Mobility, meanwhile, lost $80m for the quarter, which was the amount it made in profit for the same period in 2010. Again legal fees played their part, with Moto also citing tougher competition.

Japanese vendor NEC is also feeling the pain, announcing late this week that it is to cut 10,000 jobs at home and abroad, on an expected annual loss of $1.3bn. Sales are down across both networks and devices, and flooding in Thailand last year hit a number of the firm’s factories, NEC said.

In operator land AT&T topped the losses table, spurting a monumental $6.7bn into the ether during the final quarter of last year. Revenues were up at $32.5bn and with 9.4 million smartphones sold, the firm had its best every quarter in retail terms. But its planned takeover of competitor T-Mobile, which was blown out of the water by US antitrust authorities, is now coming back to haunt AT&T, which for some reason that the Informer will probably never understand, agreed to pay T-Mobile $4bn if the deal didn’t go through.

And let’s not forget about the network vendors. Market leader Ericsson took a hit in Q4 last year – the last one it will ever take as a result of the performance of Sony Ericsson as the Swedish player offloaded its stake to Sony last year. But it was also affected by a slowdown in network spending in North America and Russia, and its decision to take lower margin business in Europe, according to CFO Jan Frykhammar.But the company showed good recovery for the full year, notching up a 12 per cent increase in revenues year on year to SEK226.9bn (€25.6bn), while profits rose 12 per cent to SEK12.6bn.

Now, Research in Motion has been in the doldrums for some time now, with a poor performance resulting in calls from shareholders for co-CEOs Jim Balsillie and Mike Lazaridis to step away from the mess. Well, those shareholders got their wish this week as the two leaders tendered their resignation and RIM appointed insider Thorsten Heins to the chair.

Recent times might have been tough for RIM but that should not eclipse the fact that Lazaridis and Balsillie had an enormous and positive impact on the industry and the global enterprise market. That said, the wording of the press release, in which the two sought to save face, was faintly ridiculous.

“There comes a time in the growth of every successful company when the founders recognise the need to pass the baton to new leadership,” Lazaridis was quoted as saying. In RIM’s case that time is clearly when things are going tits up, you’re losing out to the competition and shareholders are calling for your resignation.

Here in the UK there was a minor kerfuffle when it was revealed that O2 had been inadvertently providing owners of websites with its customers’ mobile phone numbers without telling them. Oops.

While this was caused by an error in O2’s systems, it did force the firm to reveal the fact that it deliberately provides number details to certain website owners that it counts as ‘trusted partners’. This, it said, is to enable them to manage age verification for adult content (yeah, right. Are you over 18? Yes? Ok then.), to bill for premium content and to use services like its Priority Moments voucher scheme. O2 customers hadn’t realised this and some of them were a bit perturbed, especially given that O2 didn’t want to reveal exactly who its trusted partners are.

Anyway, between the 10th and 25th of this month, this special privilege was extended to the owner of any website browsed by O2 customers. Although it remains to be seen whether or not any of these website owners actually realised it. Quite possibly not.

Under the section head News You Could Be Forgiven Thinking Had Already Happened, given how quiet the WiMAX Forum is these days, that body announced this week that chairman Ronald Resnick is to hang up his boots. Resnick was the standard bearer for WiMAX back when there were some who felt it had the potential to grow into a worldwide contender to LTE. In 2008 the WiMAX Forum predicted 133 million users by 2012. In August last year it announced that the 20 million mark had been passed.

Resnick leaves some big shoes to fill and stepping into them will be former Airspan marketing chief Declan Byrne.

And that’s about the size of it this week.

Take Care

The Informer


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